Trading Statement

QinetiQ Group plc
29 September 2006


QinetiQ Group plc
29 September 2006

QinetiQ Group plc - Pre-Interim Close Trading Update
QinetiQ Group plc, the international defence and security technology company,
today issues the following trading statement in respect of the six months ending
30 September 2006. The company's interim results will be announced on 30
November 2006.

The Board confirms that the outlook for the year remains in line with that
described in the Company's 2006 Report and Accounts published in June and the
statement issued at the Company's Annual General Meeting on 28 July 2006.
Progress in the evolution of the business remains consistent with expectations
at the IPO.

The UK business has, as expected, traded broadly in line with the prior year.
There have been some notable sales successes including a £52.5m extension to our
support package contract with MOD for the Typhoon project, a £10m contract for
test and evaluation services to Lockheed Martin for the Merlin helicopter and a
number of new wins for our secure hosting facilities, including a £1.6m contract
with Aegate. We have also successfully flown our Zephyr solar powered UAV
non-stop for 18 hours, with strong customer interest being shown.

As previously indicated, a significantly greater proportion of UK profit is
always earned in the second half and this year that trend will be amplified by
the previously announced restructuring programme in the Defence & Technology
Sector (D&T), the costs of which have been incurred in the first half and are
expected to total some £9m. The prior year performance of the Security & Dual
Use Sector (S&DU) benefited from £9.4m of royalty income in respect of LCD
patents which have now expired, but partially offsetting this we see some first
half margin benefit from the timing of revenue investments within S&DU.

QinetiQ's North America Sector (QNA) is delivering good underlying organic
growth. Continuing strong shipments of the Talon robot have been supported by
the recent receipt of a further $23m of funded contracts and strong customer
interest in SWORDS, the armed variant. With the US DoD budget having been signed
three months into their current fiscal year, order intake was slower than
expected at the beginning of the period but has accelerated as the half has
progressed. Overall growth has, as expected, been somewhat held back by the
anticipated decline in revenue from Westar's high margin Air Filters business
compared with the first half of last year. The OSEC acquisition, completed in
May 2006, has traded in line with our expectations at the time of its
acquisition. The weakening US dollar, which has declined by some 4% year on
year, has impacted the translation of the trading results of QNA operations,
although we continue to maintain the majority of our net debt in US dollars to
mitigate the economic impact.

QinetiQ's operating cash conversion remains in line with expectations, which
include the impact of the cash outflows associated with the restructuring
programmes announced at the end of the prior financial year.
The Board considers that QinetiQ has made a solid start to its first full year
as a public company.

For further information please contact:
Nicky Louth-Davies
Head of Media and Corporate Affairs
QinetiQ
T: [phone]
www.qinetiq.com





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